The city may find new savings; the state may realize it's been shortchanging the city. What has Albany got to lose?

Albany Mayor Kathy Sheehan's decision to ask a state panel for help in solving the city's financial challenges is a smart move by the freshman mayor. It finally puts the onus on state government to answer the question: What's a cash-strapped capital city to do?

Through two mayors now — first Thomas M. Whalen III and then Jerry Jennings — Albany has pleaded with New York for help. Year after year, it made the case that, compared with other cities in the state, Albany wasn't getting its fair share. On a per capita basis, Albany's state aid was at the bottom of all the large upstate cities.

The case was as credible as the cause was futile. When the state did give more money, it mostly involved drawing down future aid — kicking the can down the road.

On the issue of giving more aid, the state often resorted to an esoteric and frustratingly unprovable argument: that the intangible benefits Albany enjoys from being the state capital — tens of thousands of state workers, a fairly steady government-based economy, and the prestige of being the seat of state government — make up for any perceived shortfall in aid.

The trouble is that intangibles don't pay the bills. And so Albany today is confronted with a future of continuing budget gaps. This year's gap of $16 million was closed largely by pulling $12 million out of the city's dwindling reserves.

Faced with that reality, Ms. Sheehan intends to go before the new state Financial Restructuring Board, composed of the state budget director, comptroller, attorney general and other appointees. That could qualify it for up to $5 million in state funds to implement solutions the board and city come up with. Ms. Sheehan hopes to use the money to upgrade the city's antiquated computer and data systems, which she says would help give the administration a clearer picture of how it spends money and where savings might be found.

Going before the board has another potential payoff: It's a very public moment of truth.

This exercise will put the state in the position of looking at Albany's books and figuring out how they might be balanced. The more draconian the solutions that the board comes up with, the stronger the city's case that the state has been shortchanging it after all. And it's hardly in the state's interests to have the host city of state government making cuts that diminish essential services. In short, the state may finally have to agree that Albany needs more aid.

On the other hand, the panel could well come up with concrete, credible solutions that Albany's mayors and budget directors have failed to see for decades — or chose not to. That might be uncomfortable, but it would also give Ms. Sheehan and the Common Council political cover to implement changes whose unpopularity would normally consign them to the waste bin.